Globespan Joint Administrators plea for enhanced regulation

Thursday 25, March 2010

Bruce Cartwright and Ian Oakley-Smith, of PricewaterhouseCoopers LLP believe that following the collapse of Scottish airline, Globespan, transitional monitoring should be put in place to protect customers should another airline or business fail.

Plans to bring merchant acquiring companies under the umbrella of the Financial Services Authority should be accelerated, says Globespan’s joint administrators.

Cartwright, Joint Administrator and head of business recovery services at PricewaterhouseCoopers in Scotland, said, “We welcome the fact that a European directive has been put in place that will require the FSA to oversee and regulate any company that provides a credit or debit card acquiring service. However, this won’t come in to force until April 2011.”

“We would ideally like to see the FSA take ownership of this financial process and put in place some transitional supervision to provide a level of protection for businesses and consumers relying on these services.”

Creditors’ meeting

During the Globespan creditors’ meeting, the Joint Administrators provided an update on the progress made since the firm went into administration on 19 December 2009. They also outlined the assets which have been sold as well as those that are actively being marketed:

Cartwright said, “The collapse of Globespan sent shockwaves through the industry and at the time of appointment as administrators, we stated that this would be an exceptionally complex process – and we were not wrong. We are pleased to be able to update creditors with the progress we have made to date, including the realisation of around £700,000 of assets.”

“We can also confirm that in terms of individual members of the public who had booked travel with the firm and are creditors, around 80 percent have either claimed or are entitled to claim their money back through consumer credit regulations or visa debit protection cover.”

“At this point in the process, we would anticipate that those unprotected creditors will receive a return of approximately 5p in every £1 before any allowance is made for any recovery of E-clear monies,” Cartwright said. “We are continuing to liaise with BDO, administrators of E-clear, in order to completely understand the full contractual position of E-clear and its suppliers. As this is still ‘work in progress’ it would be inappropriate to predict the outcome of this investigation.”

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